Paytm Inches Closer to Buying Stake in Yes Bank

Digital payments major Paytm is having "initial-stage discussions" to buy stake in Yes Bank.

"The conversations are still at a very initial stage. The finalisation of the deal may take some time as a lot of regulatory approvals will be required," a source in the know of developments told IANS on Tuesday.

When contacted by IANS, Paytm's spokesperson refused to comment.

Paytm and mobile content company One97 founder founder Vijay Shekhar Sharma also owns the Paytm Payments Bank Ltd (PPBL) and the deal with Yes Bank would require approval from the Reserve Bank of India (RBI).

As per the latest data released by the Ministry of Electronics and Information Technology (MeitY), PPBL has acquired more than 7 lakh merchants in Q1 against the target of 6.5 lakh.

As per the initial conversations, Paytm is likely to buy stake from Yes Bank co-founder Rana Kapoor, who, together with his associates, owns 9.64 per cent stake in the bank.

Yes Bank Chief Executive Officer (CEO) and Managing Director (MD) Ravneet Gill said that the talks to sell stakes to a "global technology company" are at a "fairly advanced level" and "it is close to being a done deal."

While the stake sale could start with less than 10 per cent, it could eventually go up. As per RBI rules, the maximum share an individual can hold should not exceed 15 per cent.

The Yes Bank board has already approved the move to raise $1.3 billion growth capital. But via a preferential allotment, the bank wants to bring in an extra $1-$1.2 billion.